Negative Approach On TRID Causes Problems

Most companies have not had the time to identify the positive impact of the Truth In lending, RESPA Integrated Disclosures (TRID) that must be used with applications beginning 8/1/2015. It seems integrated disclosure education events are focused on raising everyone’s level of panic. I admit there is cause for panic if you are just starting to identify procedural changes but be careful about the message making its way to the street. The sales team is only hearing the scrappy message of doom and gloom caused by the new three day waiting period prior to closing. (The pragmatists assume there will simply be the same old problems, just three days earlier than before.) The positive factors are an important part of ensuring the project team is developing the right procedures and creating and sending the right message throughout the company.

A good place to start creating the right message is by asking originators what they don’t like about the current GFE and TIL and the closing agents what they don’t like about the HUD1 and TIL. The list gets long in a hurry. A common theme is that customers don’t understand the forms. Let’s back up for a minute. If someone doesn’t understand what you are explaining, is it the fault of the receiver of the information or is it in the presentation of the information? It is critical for everyone to understand the level of testing that was conducted by the CFPB. There is a full description of the development and testing phase of the new disclosures, complete with clickable timeline, at the Know Before You Owe website: Everyone in the mortgage process should hear about this process and learn that these forms went through a very detailed development process to identify what consumers like and understand. This knowledge helps breakdown a natural resistance that occurs when the government is changing what we think we know about customers. Originators will need to make dramatic adjustments to their script and embrace the positives of the Loan Estimate (LE) when discussing the cost of the financing with customers. Start by including a message that gives some credit to the development process it took to get to this point. The same holds true for closing agents dealing with the Closing Disclosure (CD).

Many of the problems with the current GFE, such as not having a place for seller credits, no place to show total cash to close, are solved with the LE. The new Closing Disclosure (CD) actually provides columns for numbers that have been hidden off to the left side of the HUD1 since 1974. The order of the information on both forms is a specific design to present information in a format that customers understand. Use it and sell it the way it was designed to be used.

A negative or painful message about the new disclosures will ripple throughout the loan process and make its way to the consumer and then reflect poorly on the company. Knowing and embracing the benefits will be a key factor in successful implementation.